Ace investor Rakesh Jhunjhunwala says ecommerce companies are attracting too much investment without any meaningful retail disruption and is extremely bearish on the business model of existing online companies.

Kishore Biyani of the Future Group predicted “many closures” of online retailers, while Flipkart founder Sachin Bansal defended his model of business, saying profitability is in sight and the trend of discounting will continue, as the country’s top investors and retailers debated online versus offline prospects of India’s retail markets at an event.

“Most of the big companies globally have been built from the profit of cash flow and not investors’ money. I would like to see online companies with a profitable model and there isn’t any. I will believe in it when they sell at an economic price,” Jhunjhunwala said at the Retail Leadership Summit.

“I will consider buying Flipkart’s stake if it is valued at $100 million,” joked Jhunjhunwala, the founder of Rare Enterprises, who shared the dais with Sachin Bansal. Flipkart’s valuation swelled five times to $15 billion since May 2014, when it raised $210 million from DST Global and Tiger Global Management, among others.

In comparison, Shoppers Stop, Tata’s Trent and the Future Group’s three listed retail entities, have a combined valuation of less than $3 billion. India’s ecommerce market is set to rise to $50 billion by FY20 from $12 billion now, according to the Boston Consulting Group.

At this stage, online retailers have to go through years of operating losses, given the high initial investments as well as the incentives they provide in the form of discounts to attract consumers.

Over the past few months, some online retailers have said they are getting more circumspect with discounts as they seek to shore up their balance sheets.

The combined losses of the three leading online retailing platforms — Amazon, Flipkart and Snapdeal — widened to Rs 5,052 crore in FY15 as they spent heavily on infrastructure and price-offs.

Biyani of the Future Group, India’s largest brick-and-mortar retailer, said that while he doesn’t doubt the potential of online sales, he is sceptical about the deep-discounting strategy. “The difference is the cost of doing business. We will see many closures in the next six months,” Biyani said at the event organised by the Retailers Association of India.

To be sure, most retailers plan to set up portals to sell their products online. A BCG-Retailers Association of India report expects Internet users to grow to 650 million by 2020. Digital influence would be a far more pervasive force and retailers will have to reinvent themselves, according to the report.

Flipkart’s Bansal argued that technology and the building of infrastructure are only initial costs and won’t increase as the company gains size. “We are seeing signs of profitability.

Myntra is profitable at an operational level. But the business needs investment in logistics, infrastructure and bringing talent from outside India,” said Bansal.

So does that mean online companies will reduce discounting in an effort to reduce losses? “As the market grows, all of us will keep passing on the discount to the consumers.

The trend of discounting will continue,” Bansal said. Several brick-and-mortar chains seem to be in revival mode as online sellers eschew deep discounts to shore up their finances.

Same-store sales for Shoppers Stop and Future Lifestyle Fashion rose to their highest in four years in the October-December quarter on the back of aggressive promotions and strong demand for fresh merchandise.